Last updateTue, 24 Feb 2015 5pm

Bircham Dyson Bell

Bircham Dyson Bell

Alastair Collett and Richard Inston review the tax implications of making disposals from a wine collection

A near decade of record low interest rates has seen some investors’ attentions turn to alternative investments: Knight Frank’s annual The Wealth Report includes a luxury investment index which includes in its asset classes wine, classic cars, art, watches and coins. With clients moving into alternative investment classes it is important that advisers ensure they are fully informed as to the tax treatment afforded to these trophy assets.

Carolyn O’Sullivan highlights what the private practitioner needs to know about ATEDs

Historically, non-UK domiciled individuals (non doms) have purchased UK property through offshore companies for a variety of tax and non-tax related reasons. In advance of the introduction of the Annual Tax on Enveloped Dwellings (ATED) from 1 April 2013, some corporate structures were unwound to avoid this new charge. In other cases, a positive choice was made to retain the structure, despite the tax costs, because the benefits (generally removing inheritance tax (IHT) exposure and perhaps for reasons of privacy) outweighed the disadvantages.

Lucie Sleeman sets out how the Office of the Public Guardian is affected by recent developments in mental capacity law

We actively encourage clients to appoint trusted individuals under a lasting power of attorney (LPA) to ensure their affairs can be managed seamlessly and without delay in the event of a loss of capacity. We go to great lengths to satisfy ourselves that clients fully understand the consequences of the authority they are granting and the way in which the powers conferred under the document may be used in the future. The documents are there to prevent a costly application to the court for a deputy to be appointed and they are marketed to the clients we look after in our profession as insurance policies for an uncertain future. But is the way in which these documents can serve the donor’s wishes changing? Are we heading towards an era of freedom in which the donor can openly stipulate the way in which their affairs are managed if they become incapacitated? Are the drafting restrictions in the prescribed LPA forms soon to be lifted? Has the Public Guardian’s whim finally been restrained?

Paul Davidoff considers the EU Succession Regulation and whether it has fulfilled its purpose

When Christopher Columbus first crossed the Atlantic, he thought he had landed in Japan, before sailing on to China. With the benefit of hindsight and many subsequent journeys, we now believe that he had probably arrived in the Bahamas, before sailing on to Cuba and Hispaniola. It was, however, not immediately obvious to Columbus that he had not reached his intended oriental destination.

Paul Davidoff sets out the implications of ss177-178 of the Finance Act 2013

Glad tidings of great joy were declared last year for mixed domiciled married couples and civil partners. No longer will they be discriminated against when it comes to the inheritance tax (IHT) ‘spouse exemption’ under s18 Inheritance Tax Act 1984 (IHTA). Well, good news is never quite as good as it sounds when it comes to tax.

Dr Stuart Thomson discusses the rise and rise of social media in crisis communications

Crisis communication is increasingly focusing on social media, but too often the emphasis is on how fast something is posted instead of the content. It is necessary to draw breath before responding and not get too carried away with what is really just a communications tool. Social media may dominate thinking but it should not be allowed to control how an organisation responds to in a crisis.

Dr Stuart Thomson looks at the importance of policy development

Involvement in the development of policy can take many different forms, but participation and engagement in particular can make real differences to the future success of an organisation.

Jennifer Chappell assesses a new form of investment and how it could be applied to UK property

What happens if you and your business partner(s) want to invest in commercial property but don’t have the funds and can’t find a bank to lend?

Alastair Collett and Tim Hayes discuss some of the perils at the intersection of the private client and immigration worlds, perils increased by stringent new rules

For many, private client work is fascinating because of the endless variety of human situations to which practitioners apply laws and tax rules that, in themselves, can sometimes be rather dry. That very variety brings with it, however, its own rocks and shoals. One of these is the danger of the practitioner failing to appreciate that, although they can help the client with problems within their own field, the client also needs advice on other legal problems outside the practitioner’s immediate skill set. Those problems may sometimes be ones that, if not tackled, can mean the practitioner’s beautifully crafted advice is almost irrelevant.

Dr Stuart Thomson reviews the significance of consultation

Consultation continues to grow in importance. Whether it is government looking for feedback and input into policy, proposals for local development or changes to service provision, the role of the citizen now includes being consulted.

Jennifer Chappell looks at the current legal process and suggests that legislative changes are urgently required to include commercial properties within the offence

Squatting has always been a contentious subject for discussion, whether you have been the unfortunate victim of squatters taking up residence in your house, or whether you have given support to a client, colleague or friend dealing with the legal process of evicting squatters.

Angus Walker reports on the progress of HS2

The proposal for a high-speed railway line from London to the West Midlands remains on track despite a partial defeat in the High Court in March. Judicial review (JR) proceedings were launched by four parties:

Nicholas Holland and James Ratcliffe consider whether there are grounds to bring claims for investment losses after the Court of Appeal’s decision in Rubenstein

In the wake of the global financial crisis, people expected a massive surge in litigation by investors looking for someone to blame for their losses. That surge never happened. Why not? There were many reasons why the anticipated glut of litigation in the years after 2008 did not take place. Of these, we intend to focus in this article on two jurisprudential reasons for the relatively small amount of litigation in this field. One is the concept of contractual estoppel, which has unique repercussions for trustees. The other is the decision of the High Court in the case of Rubenstein v HSBC Bank Plc [2011], now overturned. The reversal of that first instance decision by the Court of Appeal potentially opens up a finite window for claims based upon losses relating to the global financial crisis. Given that these claims are likely to date back to 2008, or even 2007, limitation periods may be well advanced and urgent action needed (see box on p5).

Angus Walker reports on the progress of the Growth and Infrastructure Bill

On 18 October 2012, the government took the first step towards implementing the planning reforms announced in the 6 September statement by Eric Pickles MP, Secretary of State for Communities and Local Government, by introducing the Growth and Infrastructure Bill in the House of Commons.

Dr Stuart Thompson provides an overview of urban growth and associated policy implications

The growth of urban areas is a world-wide phenomenon, but the publication of figures from the 2011 census showed the largest increase, in terms of numbers, in the population of England and Wales since records began in 1801. The population of the UK, according to the Office for National Statistics, is on course to reach over 73 million by 2035. This will change the dynamic of the country.

Judith Millar and John Darnton guide the private client adviser through the minefield of cross-border pre-nups

While private client lawyers often like to think that they know their clients well, and approach the planning of their legal and tax affairs with a great deal of care, it is the affairs of the heart that can spring a few surprises. The voicemail message on Monday morning is short and upbeat, ‘Hi, it’s Robert, I’ve just got engaged, the wedding’s in seven weeks’ time and my mother says I need a pre-nup. Can you sort it out?’

Jennifer Chappell discusses a case highlighting the importance of ensuring that contractual obligations do not take priority over commercial interests

Property owners and practitioners alike should be wary of agreeing ‘best endeavours’ clauses in contracts, which could mean that their own commercial interests may have to be sacrificed to fulfil their contractual obligations.

As predicted, the Chancellor targeted stamp duty land tax avoidance, but also created capital gains tax and inheritance tax worries. Elaine Dobson investigates

The Budget has effectively brought to an end the loophole that saw predominantly overseas companies acquiring UK residential real estate. Such companies could then be used to avoid the payment of stamp duty land tax (SDLT) by a disposal of its shares rather than the property itself. A UK company share disposal would be liable to the payment of Stamp Duty at 0.5% on the share sale. In future, those who chose to buy residential property through ‘non-natural persons’ (not defined but will not be limited to overseas companies) will have to pay a stamp duty land tax of 15%. The Chancellor has, in effect, recognised that it is the subsequent disposal that creates a loss to HMRC and has decided to take double the tax upfront. It should be remembered that SDLT costs HMRC next to nothing to collect and is therefore one of the most efficient taxes for HMRC in terms of actual return less cost of collection.

Angus Walker analyses the progress of the Infrastructure Planning Commission

The Infrastructure Planning Commission (IPC) was set up in 2010 to receive, examine and decide applications for 16 types of nationally significant infrastructure projects (NSIP). This article summarises progress with live and up-and-coming IPC projects.

Helen Ratcliffe analyses the UK/Swiss tax agreement and the implications for trusts

Many UK-resident individuals will have family money in Swiss bank accounts that may have been there for several generations. The upheavals in Europe at the start of the last century resulted in significant funds being placed in Swiss bank accounts. Some of these individuals will be beneficiaries of family trust and company structures, and some may be non-UK domiciled. There may be concerns about UK tax compliance. This article will look at the implications that can be gleaned so far about the agreement signed on 6 October 2011 between the UK and the Swiss Confederation on co-operation in tax matters (the agreement).

Judith Morris compares the approach of the Jersey court in Re BB, A and C with that of the English court in Jasmine Trustees Ltd v Wells Hind

It is perhaps to be expected that it is only recently, as the offshore centres mature as trust jurisdictions, that the Jersey Royal Court has opined on its degree of willingness to exercise its discretion to ratify the past actions of invalidly appointed trustees in Re BB, A and C [2011]. It is more surprising that in England and Wales, with a great history of trust law stretching back into the 19th century and beyond, the principal authority on defective appointments of trustees should be the relatively recent decision of Mr Justice Mann in Jasmine Trustees Ltd v Wells Hind [2007]). For those practising in England and Wales the two cases may seem to offer a slightly depressing comparison, in the same way as do the contrasting decisions of the Court of Appeal in Pitt & anor v Holt & anor ( with Futter & anor v Futter & ors ) [2011] on the one hand, and the more generous approach taken by the Royal Court in Jersey in Re R and the S Trust [2011] on the other.

Nitej Davda explains why the proposed introduction of a criminal offence of squatting on residential premises will do little to deal with the crux of the matter

This year has seen two high-profile instances of squatting in residential property. In February, a property in Fitzrovia, owned by film director Guy Ritchie, was unlawfully occupied by squatters. It was reported that the squatters claimed they were going to set up a free school at the site. Then, over the summer, we learned of the plight of the Cockerells. Mr and Mrs Cockerell purchased a property in Hampstead, north-west London as a family home in which to raise their soon-to-be born first child, only to discover that squatters had taken up occupation of the property. Based upon press coverage surrounding the incident it took several weeks and several thousand pounds before the Cockerells recovered possession of their home.

Angus Walker looks at the likely shape of the Localism Act

The Localism Bill promises to shake up local government and the planning system through a raft of changes under the umbrella of ‘localism’ or ‘people power’. There are also changes to social housing law, and to the regime for the authorisation of nationally significant infrastructure projects that was introduced by the Planning Act 2008. Here is an outline of the main provisions of the Bill.

Helen Ratcliffe examines Taube, which concerns the classification of corporate receipts and discovery principles

In October 2010, the First-tier Tribunal (Tax) reached a decision in the case of Bessie Taube Discretionary Settlement Trust trustees & ors v HMRCC [2011]. 

John Darnton discusses Robson, which has lessons for the management of family trusts

In October 2010 the Court of Appeal handed down its judgment in Robson v Robson [2010], the lead judgment being given by Ward LJ. Much of the subsequent press commentary has focused on the relevance in this case of ‘inherited wealth’ and the extent, if any, to which the Court of Appeal judgment has added to the discussion on the treatment of such wealth on divorce. While this article touches on that subject it also seeks to examine the manner in which matrimonial proceedings can throw a harsh, and not always flattering, light on arrangements commonly put in place by land-owning families and the conflicts that these can throw up in times of strife.

Helen Ratcliffe looks at Drake v Harvey, which highlights the difficulties of estate planning for partnership shares

Partnerships are one of the frequently chosen vehicles for family businesses. The creation and operation of such partnerships requires skilful deployment of the various tax issues as well as an understanding of partnership law. From an estate planning, succession and business point of view, one of the aspects that needs to be carefully considered is the rights of a partner or their personal representatives to extract from the partnership their share of the partnership assets on death or retirement. The case of Drake v Harvey & ors [2010] about the valuation of partnership shares places this point in sharp relief.